NAFCU backs 2 patent reform bills in Senate

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Dec. 18, 2013 – NAFCU and eight other financial trades on Tuesday wrote Sens. Charles Schumer, D-N.Y., and Orrin Hatch, R-Utah, to support bills from each that would help discourage patent trolls from filing frivolous lawsuits.

In their letter to Schumer, the groups lodged support for S. 866, the “Patent Quality Improvement Act of 2013,” which would make permanent the Patent and Trademark Office’s ability to review certain business methods and invalidate low-quality patents. The bill would remove the opportunity for new patent-troll suits being filed after the PTO program expires but before patents lapse.

“By making the program permanent, you ensure that the full spectrum of low-quality business method patents will be subject to review if asserted under the threat of litigation,” the groups said.

The letter to Hatch supports S. 1612, the “Patent Litigation Integrity Act of 2013.” Hatch’s bill would allow courts, on a defendant’s motion, to require plaintiffs in unsuccessful patent infringement lawsuits to pay court fees.

Both bills await action of the Senate Judiciary Committee.

The Senate Judiciary Committee held a hearing Tuesday that touched on the problems credit unions are having with demand letters from patent trolls. John Dwyer, president and CEO of New England FCU of Williston, Vt., a NAFCU member, testified. “Patent trolls know for a small credit union, an early settlement is much cheaper than a fight,” he said. “Just to pick up the phone to evaluate the demand costs tens of thousands of dollars.”

Schumer said, “A patent reform bill that does not address patent quality is like treating the symptoms instead of the disease. If we don’t address the fundamental issue of patent quality, trolls will continue to abuse poor quality patents and we will be right back here having this same debate.”